7 Industrial Nations To Hold Line On Dollar

WASHINGTON — The seven leading industrial countries pledged Saturday to uphold their seven-month-old pact to hold the dollar`s value to about its current level in the months ahead.

But finance ministers from the seven nations, including U.S. Treasury Secretary James Baker, also agreed on the need for economic growth to pick up ``in some countries.``

The communique, issued after the 7 1/2-hour meeting, didn`t name those countries, but sources said the officials were talking about West Germany and Japan.

The other nations represented at the talks were the U.S., Canada, Britain, France and Italy.

Baker did not want this meeting to produce confrontation, sources said.

Instead, the secretary believes that early next year the United States will be in a stronger position to push other nations to expand their economies.

In another development, Canadian Finance Minister Michael Wilson said

``it`s hard to say at this point`` whether the U.S. and Canada can get back to the bargaining table and negotiate a free-trade agreement.

``There is still a lot of work that needs to be done,`` Wilson told reporters after emerging from the Group of Seven meeting.

The U.S.-Canada talks broke off last week, but both sides have been trying to get them resumed in order to beat a Saturday deadline mandated by Congress.

The seven industrial nations essentially papered over differences at this meeting after they had agreed in Paris last February to call a halt to the decline in the dollar.

Reaffirming the previous agreement has some importance because many economists believe that the dollar should decline further to reduce America`s huge trade deficit.

The seven leaders disagreed with that conclusion.

In fact, they said: ``Some important favorable results are beginning to be seen.``

They cited President Reagan`s decision to sign a deficit-reduction bill and efforts by Japan and West Germany to try to stimulate their economies.

They said progress has been made in reducing trade imbalances among the nations.

Holding the dollar steady was a costly proposition.

It required about $70 billion in dollar-buying operations by central banks of the major nations.

The U.S. was unhappy that West Germany had chosen to boost interest rates only a few days before the meeting and that Japan, fearing inflation, also was considering interest-rate increases.

Japanese officials said they would not raise the government`s official lending rates for private banks, but they hinted that higher market interest rates might be required in the near future to combat rising prices.

The Group of Seven meeting was held in conjunction with the annual meetings of the World Bank and the International Monetary Fund, which draw several thousand bankers and finance officials from all over the world.